Bonaventure Multifamily Income Trust Completes 1031 Exchange
May 24, 2024
Connect Money
By: Joe Palmisano
May 23, 2024
Bonaventure, an alternative asset manager based in Alexandria, VA, has announced the sale of an approximately $18 million investment in Attain Downtown, a 156-unit Class-A multifamily community in downtown Norfolk, as well as the acquisition of Cavalier Crossing, a 144-unit apartment community in Charlottesville.
The transactions were carried out on behalf of Bonaventure Multifamily Income Trust, Inc., a perpetual life multifamily investment fund.
BMIT will retain controlling ownership in Attain Downtown and continue to manage its operations. The company used the proceeds from the sale to acquire Cavalier Crossing through a tax-efficient 1031 exchange.
The combined transaction represents one of Bonaventure’s current investing strategies, which is to extract capital from stable core assets and reinvest it in undervalued or mismanaged value-add opportunities with the potential for higher risk-adjusted returns.
Bonaventure sold fractional ownership of Attain Downtown as a customized solution for an investor looking to use the 1031 exchange. The sale was structured as a tenancy-in-common deal, which permits numerous investors to own undivided interests in a single property while deferring capital gains taxes using a 1031 exchange.
“The 1031 transaction type allows for all involved parties to benefit. BMIT retained an ownership stake in Attain Downtown and continues to manage the property, and the new co-owner enjoys the potential for risk-adjusted returns without having to actively manage the property,” Bonaventure CEO and founder Dwight Dunton said.
Cavalier Crossing is part of BMIT’s 20-property portfolio, which includes high-quality multifamily properties throughout the Mid-Atlantic and Southeast.
Since its founding in 2021, BMIT has acquired properties, many of which have utilized custom-built 1031 or 721 exchange programs under the Internal Revenue Code.
BMIT enables high-net-worth investors to invest in institutional-grade real estate by providing access to a diverse pool of assets with attractive risk-adjusted returns, consistent cash flow, and tax benefits. To date, the fund has 3,790 units and over $1 billion in total assets under management.
Pictured: Attain Downtown
Disclosures
The article is for informational purposes only and not intended to be all-inclusive and may be changed at any time without notice or obligation to update. This article does not constitute tax, legal, or financial advice. Bonaventure does not provide tax, legal, or accounting services. Tax laws and regulations are subject to change, and individual circumstances vary. Investors should consult their own tax advisor, attorney, or qualified intermediary regarding their specific situation before pursuing any of the strategies discussed. Forward-looking statements may be influenced by a variety of factors, many of which are beyond the control of Bonaventure and could cause the actual outcomes to be materially different from what is projected. Past Performance is not indicative of future results.
Investments in the shares involves a high degree of risk that prospective investors should carefully consider before investing. The investment is for Accredited Investors who have the financial ability and willingness to accept the risks and lack of liquidity inherent in an investment in the shares. There can be no assurance that investment objectives will be achieved or that investors will receive a complete return of their capital. This material is not an offer to sell or a solicitation of an offer to buy any interest in any fund sponsored by Bonaventure or its affiliates. Any offering is made only pursuant to a confidential private placement memorandum (PPM) and related offering documents, which should be reviewed in full and which control in the event of any inconsistency with this material. Share interests are not registered under the Securities Act of 1933 or any state securities laws, and Bonaventure offerings are not registered under the Investment Company Act of 1940.